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Grocery tax relief in, gas tax holiday out of Virginia budget plan

Posted at 6:14 AM, Jun 01, 2022
and last updated 2022-06-01 13:01:15-04

RICHMOND, Va. — Virginia's divided General Assembly reconvened in Richmond on Wednesday to vote on a compromise state budget that would offer nearly $4 billion in tax relief, increase pay for teachers and other public employees, and fund a wide range of projects from roadwork to school construction.

Lawmakers returned to the Capitol in a special session because they deadlocked over the spending plan as their regular calendar drew to a close in March. They opted then to extend talks, which have been happening privately among a handful of negotiators. Lawmakers announced last Thursday that they had reached a deal.

Republican Gov. Glenn Youngkin, who campaigned on a promise to enact a broad slate of tax cuts and has been calling on lawmakers for weeks to act with urgency, said in a statement that he thought the compromise offered a “good framework." He said the General Assembly should pass it Wednesday.

“Then we will take some time and review it and see if there are amendments that are needed, and I’m hopeful we can do all of that relatively quickly," he said in the statement.

The proposed two-year spending plan — which was crafted at a time when the state's tax collections have been soaring beyond projections and there's federal coronavirus aid left to spend — includes many, but not all, of the tax cuts Youngkin pushed for.

Under the budget that would take effect July 1, about $1 billion in tax relief would go toward one-time rebates of $250 for individuals and $500 for families. About $1.6 billion would go toward increasing the standard deduction — but not quite doubling it as Youngkin had called for.

About $372 million in tax relief would eliminate the state portion of sales tax on groceries and essential personal hygiene products; $301 million would provide phased-in income tax relief for military retirees 55 or older; and $315 million would make the Virginia Earned Income Tax Credit partially refundable.

The plan does not include a gas tax holiday, which Youngkin and House Republicans had pushed for.

The budget would also boost pay for teachers, state employees and state-supported local employees. It would allocate $100 million for a Youngkin-backed initiative to partner colleges with K-12 systems to create lab schools, and would direct hundreds of millions toward school construction and modernization. Lawmakers were also scheduled to vote on adjustments to the current budget.

According to Democratic Senate Majority Leader Dick Saslaw, the General Assembly was not expected to take up one of the year's most controversial issues on Wednesday — a bill that would offer lucrative tax incentives to the NFL's Washington Commanders in an effort to lure the team to Virginia. Saslaw said Tuesday a compromise version had not been finalized yet.

The team is in the midst of a long-running search for a new stadium site, and Maryland, Virginia and the District of Columbia have all been under consideration. The stadium bill initially passed with broad, bipartisan support, but some members have since raised concerns about the size of the incentives and the various controversies swirling around the Commanders.

Virginia’s attorney general announced in April that his office had launched an inquiry into the team following allegations of financial improprieties raised by a congressional committee. The team has denied any wrongdoing.

Lawmakers were set to interview two judicial candidates for general district court positions, but still have not scheduled a vote on two state Supreme Court vacancies or an opening on the powerful State Corporation Commission.

“We’ve made zero progress since January,” said Democratic Sen. Scott Surovell, who has been involved with negotiations with House Republicans over the positions.

Surovell said the two chambers are at odds over how much sway each should have in the picks and any subsequent vacancy that might be created in a lower court if a judge were promoted.

GOP House Majority Leader Terry Kilgore agreed with that assessment of the impasse.

Also Wednesday, House Democrats voted on a new caucus leader, then immediately filed into the chamber to start the session without announcing the results.

The 48-member group ousted minority leader Eileen Filler-Corn in April, months after an unsuccessful election cycle that saw the party lose full control of the state government. But they didn't immediately elect a new leader at the time.